Not out of the woods yet, Bendix president warns

May 1, 2010

LOUISVILLE, Ky. - There was a renewed sense of optimism among suppliers at this year's Mid-America Trucking Show, but Bendix president Joe McAleese warned manufacturers are not completely out of the w...

May 1, 2010
by
James Menzies

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Companies

LOUISVILLE, Ky. –There was a renewed sense of optimism among suppliers at this year’s Mid-America Trucking Show, but Bendix president Joe McAleese warned manufacturers are not completely out of the woods yet and may be in for some more hurt before the industry fully recovers.

McAleese said Bendix enjoyed a strong first quarter, but acknowledged conditions may deteriorate once more, now that EPA07 engine inventory has dried up and only the more costly 2010 engines are now available.

“The first quarter has been good in the aftermarket and OE (businesses), driven by the fact tonnage is up somewhat, because at end of the day that’s what’s going to drive our industry. But I think those good times are about to come to a close,” McAleese warned. “I think we’re going to see a recovery, the question is when and I don’t think it’s going to be until late this year from a manufacturing standpoint.”

The timing of the recovery will hinge on the economy, freight volumes and the performance of the EPA2010 engines, McAleese predicted. Unfortunately, he said it may be 2012 before truck sales reach Q1 2007 levels, which at the time were thought to be abysmal.

“To put things in perspective, 2006 was a big boom year for us and everyone was talking about the cliff event that was going to happen for us in the first quarter of 2007 and how bad it would be -and it was,” McAleese said. “It was awful. And I think we’re longing for the day in 2012 where we get back to the first quarter of 2007 build levels. I don’t think we’re going to see 07 build levels again until 2012 and I think we’re going to be very happy (to see them).”

The economic crisis of the past couple years has forced OEMs to reestablish their focal points, focusing more strongly on markets like Brazil, Russia, India and China, which for the most part escaped the global recession, McAleese pointed out. For Bendix’s part, the company focused strongly on developing products that fleets would benefit from using -products that enhanced safety and provided a fast payback.

“Our focal point in all these technologies is to develop a value proposition where it makes sense for a fleet to put this technology on their vehicles because they’re going to save lives and will make economic sense for them with a payback in a reasonable amount of time,” McAleese said.

Meanwhile, the company is lobbying government to provide incentives to help small and mid-sized fleets reap the benefits of safety systems such as electronic stability and collision mitigation systems such as the company’s Wingman ACB.

McAleese said it’s only a matter of time before government mandates the use of proven safety technologies, likely beginning with stability systems as early as this year.

“We believe there will be a stability mandate come out before the end of 2010, implemented in 2012, 2013 or 2014,” McAleese said. “In the longer term, we think we’ll have some kind of collision mitigation mandate in 2014 or 2015.As the real benefits of these systems becomes apparent, we’re going to see mandates in some of these areas. I think that’s just inevitable. Our focal point is making sure these systems have strong payback for fleets.”